Aave voted 100% yes on lending against real Bitcoin, but nobody can borrow yet.
Here's what actually passed on Nov 9, per Babylon Labs: a preliminary vote to let $BTC holders borrow stablecoins on Aave V4 while the coins stay locked on the Bitcoin network. No wrapping, no bridge.
How it would work:
• BTC sits in a Babylon vault on Bitcoin
• Aave sees a transfer-restricted record on Ethereum, not a tradable token
• Proposed collateral factor: 78%
• Initial Core Hub credit lines: $21M in total ($8M each for USDT and USDC)
What it doesn't change yet: a final on-chain vote (AIP) is still required, and the rollout targets late 2026 with limits on participants and volume.
My read: the headline says "native BTC", but liquidations still lean on WBTC. Liquidators get paid in WBTC right away, and the real BTC is redeemed days later. So the wrapped-token dependency moves, it doesn't vanish. Liquidations also take whole vaults, not slices.
Does a $21M cap make this a real market or a pilot? #Aave #DeFi $AAVE
Disclosure: Write to Earn may pay me a commission on cashtag trades.
Here's what actually passed on Nov 9, per Babylon Labs: a preliminary vote to let $BTC holders borrow stablecoins on Aave V4 while the coins stay locked on the Bitcoin network. No wrapping, no bridge.
How it would work:
• BTC sits in a Babylon vault on Bitcoin
• Aave sees a transfer-restricted record on Ethereum, not a tradable token
• Proposed collateral factor: 78%
• Initial Core Hub credit lines: $21M in total ($8M each for USDT and USDC)
What it doesn't change yet: a final on-chain vote (AIP) is still required, and the rollout targets late 2026 with limits on participants and volume.
My read: the headline says "native BTC", but liquidations still lean on WBTC. Liquidators get paid in WBTC right away, and the real BTC is redeemed days later. So the wrapped-token dependency moves, it doesn't vanish. Liquidations also take whole vaults, not slices.
Does a $21M cap make this a real market or a pilot? #Aave #DeFi $AAVE
Disclosure: Write to Earn may pay me a commission on cashtag trades.